First of all, Merry Christmas, Happy Holidays, and all the best in the New Year to each of you. It has once again been a pleasure to share the year with all of you and to interact. While personal finance is the basis around which we converse, it has been great sharing parts of my life with you and learning about yours.
At the start of the year, I began with a straightforward plan to pay closer attention to my portfolio on a monthly basis and track the passive income I earn. As a dividend growth investor, it is easy to fall back on autopilot and just accumulate dividends. That’s both the beauty and the risk of the strategy; it doesn’t require a lot of maintenance once you’ve set the foundation.
This update marks the twelfth consecutive monthly update that I have published. I write this with satisfaction and a hint of pride as it has at times proven challenging to remain consistent in the past with my writing.
Table of Contents
CAD Dividends
| Company | CAD Payments ($) | Div Increase (%) |
|---|---|---|
| RioCan Real Estate Investment Trust (REI.UN) | 31.32 | |
| The Coca-Cola Company (KO) | 69.18 | |
| Johnson & Johnson (JNJ) | 76.54 | |
| Corby Spirit and Wine Ltd. (CSW.B) | 50.60 | |
| Fortis, Inc. (FTS) | 72.00 | 5.88 |
| Canadian Utilities Limited (CU) | 78.66 | |
| Canadian National Railway Company (CNR) | 6.83 | |
| Hydro One Ltd (H) | 59.80 | |
| Chartwell Retirement Residences (CSH.UN) | 4.90 | |
| Brookfield Renewable Partners L.P. (BEP.UN) | 123.83 |
USD Dividends
| Company | USD Payments ($) | Div Increase (%) |
|---|---|---|
| Waste Management, Inc. (WM) | ||
| McDonald’s Corporation (MCD) | ||
| Yum! Brands, Inc. (YUM) | ||
| Yum China Holdings, Inc. (YUMC) | ||
| Visa Inc. (V) |
Dividend Summary
December was easily the banner month to cap off 2018. I reached new records in dividends earned in a single month with $573.66 CAD and $58.53 USD ($632.19 in currency-neutral terms) from fifteen companies. This exceeds my previous record in currency-neutral dividends by around $150. That is quite a feat and is really the end product of a yearlong journey of diligent investing of fresh capital along with the reinvestment of dividends earned.
Depending on the timing of a purchase, it can take at least a few months before the income starts rolling in given that many companies pay quarterly and if a purchase is made after the “ex-dividend date”, it could actually be around four months before income is received. This was the case for me with BEP in particular; I made four separate purchases of this company from July onward and only received a full payment from all shares with the December 31 distribution.
This was far-and-away the best December I have ever had for dividend income:
Market Activity
I did not make any stock purchases in December. This is only the third month this year in which I kept to the sidelines. I have, though, been moving some cash around and am likely to press the action again in January. I can only hope the market remains deflated in the interim so I can take advantage of higher dividend yields on high quality companies.
My main watchlist is the group of companies I already own; I would rather increase a stake in a company I have already become familiar with and enjoy owning rather than spreading money across new pastures.
While each new company purchased requires more of my mental resources to research and understand, I effectively get more value by doubling down with what I know. When there is an overall market selloff, high quality names get punished along with the trash and opportunities become more plentiful.
Cash
One of my banks recently increased the interest it pays to 3% and so I have transferred my cash holdings to take advantage of this. My first full month reaping the benefit will be January as I made this move mid-December.
It is generally not a good investment strategy to keep a huge amount of money liquid in cash as it loses value over time to inflation. However, I do believe it is vital to keep a healthy stockpile both as insulation against unexpected life events and also as fresh investment capital in times of market upheaval. We are humans, after all, and not everything is about maximum financial gain; there is something reassuring knowing I have five figures of cash parked on the sidelines should I ever have any reason to need to tap into it.
Conclusion
Finishing the year with a new dividend income record feels great. I have been eagerly anticipating this portfolio update as I knew based on purchases I had already made that it would be a strong finish.
I don’t believe I would be in this good of a position if I were not sharing these updates on a monthly basis. It holds me accountable to put this out there for you to review, critique, and analyze along with me. Likewise, I have learned plenty along the way as, by commenting on these articles, you have offered new investment theses and different angles on old ones.
I’m planning to continue sharing in the year to come and hope you’ll be there with me along the way.
Full Disclosure: Long REI.UN, JNJ, CSW.B, FTS, CU, CNR, H, CSH.UN, MRU, BEP, WM, MCD, YUM, YUMC, PEP, WMT, and V